News / Geodis: innovation and customer service the key to growth

Geodis may be in talks with CMA CGM, according to some market observers, but Thomas Kraus, head of northern and central Europe for Geodis, preferred to talk about customer satisfaction and new technologies, in a recent interview with The Loadstar. 

But he did note that shareholding structures were irrelevant to the market – and that having SNCF as a shareholder gave Geodis stability.  

“Ceva is still a competitor – we are not affected by its shareholding structure. Customers will base their decision on the offering and service, so there would be no material impact from the fact it is owned by a supplier [CMA CGM]. And we have seen no effect so far from Maersk’s move towards forwarding – it always had Damco anyway.  

“The shareholding structure is one thing – we have SNCF, which is a good, stable shareholder for us.” 

Geodis remains hungry for growth, however. While Mr Kraus confirmed reports last year that Geodis was seeking a stronger position in Germany, the Netherlands as well as the US and China, and was looking at a target turnover of between €1.5bn and €2bn, it may also be looking at smaller targets. And it has eyes on Sweden. 

“We want to make sure any growth is what our customers want. We are the market leader in Sweden, with a 25% market share. We have a huge market share in freight forwarding, and are thinking of expanding in the Swedish contract logistics market. 

“The opportunities for growth are where we have new customers with diverse requirements. That is still the strategic approach to our business.  

“We are in a very dynamic market, where positions change. Chasing staff [that have left other merging organisations] is not the way we would grow. We succeed in getting the most qualified staff to serve customers, and we have a good development programme.  

“If we have the best staff, that means someone else doesn’t. Our ambition is to have the most long-term relationships with customers.” 

To that end, last year Geodis reorganised its structure, a decision that is beginning to bear fruit, said Mr Kraus. Previously, in line with many competitors, it was organised by lines of business. But customers were organised differently.  

“There is a huge benefit to focusing on capabilities produced across the supply chain, with different buying behaviours. So we let the structure follow strategy, which complements distinct capabilities in four regions. 

“In each region now we have a full offering. And there are green shoots starting to emerge in cross-selling to our customers. The re-organisation has been very well received. We are fully staffed on all competencies, so can cater to our customers in the way they are organised.” 

But customers are also becoming more demanding, and asking more of their 3PLs, said Mr Kraus.  

“There is a change in the market – customers are looking for more value and what complexity we can take out of their supply chains. There are things like near-shoring, moving production sites out of China to countries like Vietnam. The change in trends is happening fast. Customer experience is key for us.  

“FMCG is more and more based on the ability to provide a superior service. That’s been a real change. Customers want lack of complexity, service, and for us to be able to deal with the speed of change.” 

As a result, Geodis has been investing in new technologies, with some 50% of its investment in process improvement going into digital technology. It already has its IRIS IT system, but customers need more, he said. 

“In the automotive industry there are new trends, with the omnipresent digitisation and visibility in the supply chain required. And there is the robotisation of processes. It’s increasingly important for customers to have supply chain visibility.” 

But, he added: “We have also worked on augmented reality, for example in warehousing design. You can get full augmented reality, and generate a sense of ownership to customers with 3D technology.” 

The technology allows customers to ‘wander’ through a virtual warehouse, support its planning and design and it makes them feel it is theirs already, he explained. Only one other major forwarder has the same technology, currently. 

“There are some small innovations that make a big difference, such as using technology to count physical inventory, and drones. It complements what we’ve already got. We are always looking at engineering new processes. It makes a tremendous difference, and it changes so fast, you have to be agile.” 

And what of the digital start-ups? Are they a threat? 

“We are a digital forwarder,” he said firmly. “And anything that challenges us on that front, makes us better.”